12. The calculation of a firm's Market Value Added (MVA) and Economic Value Added (EVA) Taj, your newly appointed boss, has tasked you vvith evaluating the follow'ng financial data for Atherton Corp. to determine how Atherton's value has changed over the past year. The investment firm for which you work will make a positive (or "buy") recommendation to its investing clients if Atherton's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell 9 recommendation if the value has decreased. He has recommended that you use several metrics to ascertain how the firm's value has changed, and he has provided you with the follow'ng income 155,000 202,125 952,875 173,250 779,625 311,850 510,595 486,281 960,094 366,581 349,125 statement and balance sheet. Atherton Corp. Income Statement January 1 - December 31, Year 2 Year 2 Atherton Corp. Balance Sheet December 31, Year 2 Sales Expensesl EBITDA Depreciation and amortization expense EBIT Interest expense EBT Tax expense (40%) Net income Common dividends Addition to retained earnings IExcludes depreciation and amortization $467,775 $280,665 $187,110 Year 1 945,000 183,750 761,250 131,250 630,000 252,000 $378,000 $226,800 $151,200 Assets: Cash and cash equivalents Receivables Inventory Current assets Net fixed assets Total assets Liabilities and Equity: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock ($1 par) Retained earnings Total equity Total debt and equity Shares outstanding Weighted average cost of capital Year 2 $314,213 1,047,375 2,042,381 $785,531 2,395,870 1,466,325 $5,236,875 366,581 7.98% Year 1 $299,250 997,500 1,745,625 $748,125 1,047,375 2,281,781 3,241,875 1,745,625 349,125 7.30%